Recent housing data, courtesy of Zillow Research, shows that the housing market in the Rogue Valley and the South Coast is beginning to stabilize. The rate of increases in home prices and rental costs are starting to slow or level out. In other words, the hot housing market we’ve seen coming out of the Great Recession is beginning to show some signs of cooling.

Many, but not all, areas of the country saw a run-up in home prices prior to the housing bubble collapse during the Great Recession. Rogue Valley and the South Coast were no exception. Home prices in Jackson County, for example, rose moderately prior to 2003 – the average home price was about $175,000 in the summer of 2003. Just three years later, in the summer of 2006, the average home sales price peaked at $295,000. The saying “what goes up must come down” applied to home prices as the housing bubble popped during the recession. Almost as rapidly as home prices rose, the average home price in the Rogue Valley fell to about $170,000 in early 2012.

As the recovery from recession took hold, home prices again began to climb from their nadir. But this latest run-up in prices appears to be based on more traditional supply and demand factors, rather than the speculative buying, home-flipping, and lax lending standards that spurred the 2003 to 2006 home price spike.

Once prices began to collapse, many borrowers were over-leveraged in their mortgages and quickly found themselves underwater – owing more money on their homes than they were worth. Soon foreclosure and real estate owned properties were being dumped on the market, and home prices continued to drop. If you were fortunate enough to keep your job and income through this whip-saw period of rising then collapsing home values, owing more on your property than it could be sold for was not a problem, since the mortgage could still be paid. But many who owed more than their home was worth also lost jobs, or saw their incomes fall. Many decided just to walk away and let their lenders foreclose on the property, further flooding the market with available properties. Rental prices didn’t experience the same boom-bust cycle. Many counties in Oregon saw similar boom-bust-recovery trends in their home sales prices.
Rogue Valley and South Coast Housing Market Trends
state of oregon employment department | july 11, 2019
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As some former home-owners were forced to rent, additional demand for rental housing was created and possibly kept prices from declining during the recession. In 2012 and 2013, Rogue Valley and South Coast rental prices were generally flat, rising just slightly in Jackson County from about $1,050 in mid-2012 to about $1,150 in mid-2014. During the next three years, average rental costs in Jackson County, and other counties in Southwestern Oregon, increased at a faster pace. By mid-2017, average rent in Jackson County reached just more than $1,500 per month. By summer 2017, average rents exceeded $1,400 in Curry County, about $1,300 in Josephine County, and about $1,200 per month in Coos County. From May 2018 to May 2019, the pace of rental price increases generally moderated – aside from Josephine County where the average price climbed 6.2 percent. The rate of rental cost increases were lower in Coos (3.5%), Curry (1.7%), and Jackson County (1.2%). If wages can keep rising with the tighter labor markets, that may help the high number of Rogue Valley and South Coast renters who are considered “rent-burdened,” paying 30 percent or more of their income on rent.  That is, if rental costs continue to stay fairly flat going forward.
The Chamber of Medford/Jackson County
101 E. 8th St.  |  Medford, OR 97501
Phone: (541) 779-4847

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